How to get Good Mortgage Advice

Because I am a mortgage loan officer it is  often I receive calls from friends for  advice. Recently a friend called me  for advice on a real estate transaction that he was considering.  I know what a serious decision it is to buy or sell the single largest asset a typical American family owns and so I am as frank ans candid as I know how but in this case it was purely speculation for profit so it was even more complicated.

My friend and I have a relationship extending  more than two decades and  I consider him one of my best and most genuine friends.  However we couldn’t be more different politically and as a result we often have to put it mildly spirited debates.  In spite of this it was still me that he called for advice.

The deal he wanted me to advise him on was with a long-term family friend of his [who I did not know] and required my friend assuming an overwhelming  majority of the risk for very little profit potential. In fact the only way that my friend could benefit would be from his friends loss of initial principle investment because the deal went  south and thus likely resulting in the loss of his friendship with that person.

After listening to him share with me his reasons for why he thought this was a good business opportunity (and there were numerous but none that didn’t end badly) I suggested that he pass on this deal altogether because of the following reasons in order of their merits;


1)
 There was no potential for profit without the loss of his friend’s principal investment and thus the relationship with that person.

2)
 The risk to him and his family was too great for what little profit potential existed.

3)
 Engaging in this deal would likely prevent him from being able to take advantage of a real investment opportunity which could actually result in profit without anyone that he knows, likes and trusts getting injured in the process.

When I revealed to him these opinions, he said to me

“Because you are a Republican I figured you would say something like that”.

Recently the word Republican, like “Banker” has been used interchangeably to disparage and slander (and is often incorrect) my business but what made this stand out to me was how he said it.  It was almost as if it was a disparaging remark and he was sorry for having used it!

Given the context I understood that what he really meant to say is that he trusted me to give him the advice that was unpopular because when he called me that’s what he needed but what he really wanted was for me to tell him was it was a great deal and that I couldn’t wait to help him get started by making him the mortgage!

In the end I lost an opportunity to make a profit myself  but I retained a friend and a friend also retained a friend and hopefully those friends will find other opportunities to profit that don’t require one of them to be injured in pursuit of profits.

I don’t know if the advice was “Republican” advice or not, all I really know for sure is that was my advice.  If you or anyone you know would like to receive this kind of sincere advice from a friend in the business I always have time to make
new friend.

Sincerely,

Your NEW Friend in the Business,

Ricardo Cobos


*Disclaimer – 
all real estate involves risk and sometimes people sustain losses in those transactions, hence the nature of a free market. But to engage in a for profit deal where the only way you make that profit is by someone else losing in my opinion is not a formula for success. In lending we call that Predatory Lending and it is illegal.

Comments

  1. Drew Ludlow says:

    Combining friendship and business is nearly as deadly as combining family and business. It is just too hard to do without some sort of backlash. It’s OK to become friends while engaging in business together, but taking a friendship and spinning into a joint venture is a recipe for damaged egos.